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EXHIBIT 10.43
FIRST AMENDMENT TO
SECURITY AND LOAN AGREEMENT
AND ADDENDUM THERETO
This First Amendment ("Amendment") amends that certain Security
and Loan Agreement ("Security and Loan Agreement") and the attached Addendum,
("Addendum" and together with the Security and Loan Agreement the "Agreement")
both dated June 9, 1998 between Imperial Bank ("Bank") and Alpha Microsystems
("Borrower") as follows:
1. The following Section 2.e is hereby added to the Addendum:
"e. Borrower and its subsidiaries have reviewed the areas within their
operations and business which could be adversely affected by, and have
developed or are developing a program to address on a timely basis, the
Year 2000 Problem and have made related appropriate inquiry of material
suppliers and vendors, and based on such review and program, the Year
2000 Problem will not have a Material Adverse Effect upon its financial
condition, operations or business as now conducted. . "Year 2000
Problem" means the possibility that any computer applications or
equipment used by Borrower may be unable to recognize and properly
perform date-sensitive functions involving certain dates prior to and
any dates on or after December 31, 1999."
2. Section 7.a of the Addendum is hereby amended to read in full as
follows:
"a. On a quarterly basis, maintain a minimum EFFECTIVE TANGIBLE NET
WORTH (defined as stockholder's equity, plus subordinated debt, if any,
less any intangible assets) of not less than $6,750,000 through 3/31/99,
$6,000,000 at 6/30/99, $5,500,000 at 9/30/99 and $5,400,000 at 12/31/99,
plus 70% of positive net income after taxes, if any, for each period."
3. 7.b of the Addendum is hereby amended to read in full as follows:
"b. On a quarterly basis, maintain a maximum TOTAL DEBT TO EFFECTIVE
TANGIBLE NET WORTH (defined as total liabilities excluding deferred
revenues to effective tangible net worth) of not more than 1.50 to
1.00."
4. Section 7.c of the Addendum is hereby amended to read in full as
follows:
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"c. On a quarterly basis, maintain a minimum QUICK RATIO (defined as
cash and equivalents and accounts receivable to current liabilities less
deferred revenues) of at least 1.50 to 1.00."
5. The following is hereby added as Section 7q. to the Addendum:
"q. YEAR 2000 COMPLIANCE. Borrower shall perform all acts reasonably
necessary to ensure that (a) Borrower and any business in which Borrower
holds a substantial interest, and (b) all customers, suppliers and
vendors that are material to Borrower's business, become Year 2000
Compliant in a timely manner. Such acts shall include, without
limitation, performing a comprehensive review and assessment of all
Borrower's systems and adopting a detailed plan, with itemized budget,
for the remediation, monitoring and testing of such systems. As used in
this paragraph, "Year 2000 Compliant" shall mean, in regard to any
entity, that all software, hardware, firmware, equipment, goods or
systems utilized by or material to the business operations or financial
condition of such entity, will properly perform date sensitive functions
before, during and after the year 2000. Borrower shall, immediately upon
request, provide to Bank such certifications or other evidence of
Borrower's compliance with the terms of this paragraph as Bank may from
time to time require."
6. Except as provided above, the Agreement remains unchanged.
7. This Amendment is effective as of 11/22/98 and the parties hereby
confirm that the Agreement as amended is in full force and effect.
Alpha Microsystems
By: ____________________________
Title: _________________________
By: ____________________________
Title: _________________________
Imperial Bank
By: ____________________________
Title: _________________________
